NASDAQ: NAKAW

Business
Segments

As
of December 31, 2025, we have two principal business segments:

●Bitcoin
Operations: houses our Bitcoin treasury and is utilized to support investments in other Bitcoin
related companies.

●Healthcare
Operations: provides a patient-focused healthcare experience that provides patients personalized
solutions in order to reduce opioid use and improve health outcomes.

Our
Businesses

Bitcoin
Operations

A
core component of our business strategy is the acquisition and holding of Bitcoin as a treasury reserve asset. We believe Bitcoin is
an attractive asset because (i) it can serve as a store of value, supported by a robust and public open-source architecture, that is
untethered to sovereign monetary policy, (ii) due to its fixed supply, Bitcoin offers the potential to serve as a hedge against inflation
in the long-term and, if its adoption increases, the opportunity for appreciation in value, and (iii) the Bitcoin network provides the
infrastructure and opportunity for the development of financial and technological innovations. As of December 31, 2025, we held approximately
5,342 Bitcoin that was valued at $467.5 million, based on the $87,519 price of Bitcoin on December 31, 2025.

We
expect to continue to accumulate Bitcoin in the future and to pursue strategies to create income streams or otherwise generate funds
using our Bitcoin holdings. Our Bitcoin operations strategy also includes making minority investments into other Bitcoin-native companies.
In 2026, we established a designated trading wallet for an options-writing strategy on a portion of our Bitcoin, that can include selling
covered calls and cash-secured puts.

Our
acquisitions of Bitcoin are conducted through U.S.-based, institutional-grade custodians and reputable third-party exchanges. Our process
for purchasing Bitcoin involves due diligence on counterparties, execution through regulated exchanges or over-the-counter desks, and
careful consideration of transaction costs, including exchange fees, spreads and custody fees.

We
hold all of our Bitcoin in custody at U.S.-based, institutional-grade custodians that have demonstrated records of regulatory compliance
and information security. The primary counterparty risk we are exposed to with respect to our Bitcoin is performance obligations under
the various custody arrangements into which we have entered.

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Overview
of the Bitcoin Industry and Market

Bitcoin
is a digital asset that is issued by and transmitted through an open-source protocol, known as the Bitcoin protocol, collectively maintained
by a peer-to-peer network of decentralized user nodes. This network hosts a public transaction ledger, known as the Bitcoin blockchain,
on which Bitcoin holdings and all validated transactions that have ever taken place on the Bitcoin network are recorded. Balances of
Bitcoin are stored in individual “wallet” functions, which associate network public addresses with one or more “private
keys” that control the transfer of Bitcoin. The Bitcoin blockchain can be updated without any single entity owning or operating
the network.

The
global Bitcoin market has experienced significant expansion in recent years, with the total market capitalization of Bitcoin reaching
$1.7 trillion as of December 2025. This growth reflects both the increasing adoption of Bitcoin as a store of value and its emergence
as a foundational asset within the broader digital asset ecosystem. We believe the number of people with exposure to Bitcoin continues
to rise, and daily transaction volumes regularly exceed billions of dollars, underscoring the asset’s liquidity and global reach.

Creation
of New Bitcoin and Limits on Supply

The
Bitcoin protocol limits the total number of Bitcoins that can be generated over time to 21 million. As of December 31, 2025, approximately
20 million Bitcoins have been generated, further highlighting the asset’s scarcity and long-term value proposition. New Bitcoins
are created and allocated by the Bitcoin protocol through a “mining” process that rewards users that validate transactions
in the Bitcoin blockchain. Validated transactions are added in “blocks” approximately every 10 minutes. The mining process
serves to validate transactions and secure the Bitcoin network. Mining is a competitive and costly operation that requires a large amount
of computational power to solve complex mathematical algorithms. This expenditure of computing power is known as “proof of work.”

To
incentivize miners to incur the costs of mining Bitcoin, the Bitcoin protocol rewards miners that successfully validate a block of transactions
with newly generated Bitcoin. The current reward for miners that successfully validate a block of transactions is 3.125 Bitcoin per mined
block. The mining reward is reduced by half, which is referred to as a Bitcoin halving, after every 210,000 blocks are mined. This has
historically occurred approximately every four years. The most recent Bitcoin halving occurred in April 2024, and the next Bitcoin halving
is expected to occur sometime in 2028.

Modifications
to the Bitcoin Protocol

Bitcoin
is an open-source network that has no central authority, so no one person can unilaterally make changes to the software that runs the
network. However, there is a core group of developers that maintains the code for the Bitcoin protocol, and they can propose changes
to the source code and release periodic updates and other changes. Unlike most software that has a central entity that can push updates
to users, Bitcoin is a peer-to-peer network in which individual network participants, called nodes, decide whether to upgrade the software
and accept the new changes. As a practical matter, a modification becomes part of the Bitcoin protocol only if the proposed changes are
accepted by participants collectively having more than 50% of the processing power, known as hash rate, on the network. If a certain
percentage of the nodes reject the changes, then a “fork” takes place, and participants can choose the version of the software
they want to run.

Forms
of Attack Against the Bitcoin Network and Wallets

Blockchain
technology has certain built-in security features that make it difficult for hackers and other malicious actors to corrupt the blockchain
or protocol. However, as with any computer network, the Bitcoin network may still be subject to certain attacks. Some forms of attack
include unauthorized access to wallets that hold Bitcoin and direct attacks, like “denial-of-service attacks” or “51%
attacks” on the Bitcoin network.

Bitcoin
is controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet
in which the Bitcoin is held. Private keys used to access Bitcoin balances are not widely distributed and are typically held on hardware
(which can be physically controlled by the holder or by a third party such as a custodian) or via software programs on third-party servers.
One form of obtaining unauthorized access to a wallet occurs following a phishing attack where the attacker deceives the victim and manipulates
them into sharing their private keys for their digital wallet or other sensitive information. Other similar attacks may also result in
the loss of private keys and the inability to access, and effective loss of, the corresponding Bitcoin.

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A
“denial-of-service attack” occurs when legitimate users are unable to access information systems, devices, or other network
resources due to the actions of a malicious actor flooding the network with traffic until the network is unable to respond or crashes.
The Bitcoin network has been, and can be in the future, subject to denial-of-service attacks, which can result in temporary delays in
block creation and in the transfer of Bitcoin. A “51% attack” may occur when a group of miners attain more than 50% of the
Bitcoin network’s mining power, thereby enabling them to control the Bitcoin network and protocol and manipulate the blockchain.
See “Risk Factors — Risks Related to Our Bitcoin Strategy and Holdings” for more information on the related risks.

Other
Digital Assets

As
of the date of this Annual Report on Form 10-K, Bitcoin was the largest digital asset by market capitalization. However, numerous alternative
digital assets exist, and many entities, including consortia and financial institutions, are actively researching and investing
resources in blockchain platforms and digital assets that utilize consensus mechanisms other than proof-of-work mining, which is
employed by the Bitcoin network. For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake”
mechanism for validating transactions that requires significantly less computing power than proof-of-work mining. Other alternative
digital assets that compete with Bitcoin in certain ways include “stablecoins,” which are designed to maintain a
constant price because of their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar deposits and
short-term U.S. treasury securities) equal to the total value of stablecoins in circulation. Stablecoins have grown rapidly as an
alternative to Bitcoin and other digital assets as a medium of exchange and store of value, particularly on digital asset trading
platforms. Additionally, central banks in some countries have started to introduce digital forms of legal tender.

Healthcare
Operations

Kindly
LLC (“Kindly”), a Utah limited liability company, is a patient-first healthcare company redefining value-based care and
patient-centered medical services. Formed in 2019, Kindly leverages focused integration of mental healthcare to
deliver evidence-based, personalized solutions in order to help reduce opioid use, improve health outcomes, and provide
algorithmic guidance on the use of alternative medicine in healthcare.

We
offer both in-person and telemedicine options for patients. Kindly provides management of, but not limited to, pain, functional medicine,
cognitive behavioral therapy, addiction, recovery support services, overdose education efforts, peer support, limited urgent care, preventative
medicine, medically managed weight loss, and hormone therapy.

In March 2026, the Company announced that it now intends to exit its legacy healthcare business.

Business
Revenue Streams

We
currently earn revenue through (i) patient care services related to medical evaluation and treatment,
(ii) service affiliate agreements, and (iii) product retail sales.

Patient
Care Services

Payments
are received from patients directly or reimbursed from Medicare, Medicaid, or commercial insurance contracts.

Behavioral
Therapy and Guided Therapy Visits

Behavioral
health therapy visits are integrated into the Company’s clinical model and are performed either on a fee for service basis or reimbursed
through traditional insurance contracts. The clinical model includes targeted behavioral therapy sessions at each visit, plus the Company
offers traditional therapy sessions with licensed therapists trained in trauma-based therapy and other modalities as described at kindlymd.com.

Data
Collection and Research

Kindly
collects data through our services and interactions. Clients provide data directly, as do clinicians and staff by collecting
data about interactions such as product and medication use, experiences, and behaviors. The data we collect depends on the context of
the interactions with Kindly and the choices people make, including their privacy settings and the products and features they use. We
also obtain data about customers, patients, and clients from third parties.

The
information gathered resides in our Electronic Health Record, where we have BAAs with each entity accessing this system. A manual review
may be conducted by Kindly employees or vendors who are working on Kindly’s behalf.

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We
share data only with consent or authorization. Data may be shared with Kindly’s affiliates and subsidiaries, vendors acting on
our behalf, or as required by law or legal processes. Additionally, we may share data to protect patients and customers, safeguard lives,
ensure the security of our products, and uphold the rights and property of Nakamoto’s shareholders, as well as Kindly’s customers,
and patients.

Kindly
is required to protect the information it collects and maintains. Kindly respects the right to privacy and protects the information
it maintains about clients and patients in accordance with all required laws, regulations and standards. All healthcare data
is anonymized and governed by HIPAA. Personal identifying information is protected and removed from any
research, publication, lease, or sale to any third party.

BTC
Inc and UTXO Acquisition

On
February 20, 2026, we acquired BTC Inc, the leading provider of Bitcoin-related media and events, and UTXO, an investment firm focused
on private and public Bitcoin companies. The acquisition represents a significant addition to our portfolio and advances our mission
to develop an ecosystem of Bitcoin-native companies.

BTC
Inc

BTC
Inc is the parent company of Bitcoin Magazine, The Bitcoin Conference and Bitcoin for Corporations. Since 2013, BTC Inc has created a
portfolio of media brands, an unparalleled client and leadership network and a global event series. BTC Inc’s growth has endured
Bitcoin market dynamics and provided stable revenue, product growth and market insights. Our seasoned team can rapidly deploy brands
and products in-house and through licensing and partnership, that evolve with market demand and provide durable sources of revenue.

BTC
Inc’s portfolio spans 27 media brands, reaching approximately 6 million people globally through its aggregated social media followers.
BTC Inc is the organizer of The Bitcoin Conference, the largest Bitcoin event series across the United States, Asia, Europe and the Middle
East, which hosted approximately 67,000 attendees in 2025.

Core
Event Products

●Flagship
annual Bitcoin Conference with 31,000+ attendees.

●Scaled
through local licensing and joint ventures, expanding into a global brand.

●Conferences
active across the U.S., Europe, Middle East and Asia.

Core
Media Projects

●Anchored
by Bitcoin Magazine, one of the longest running Bitcoin media brands.

●Global
content, advertising and marketing platform.

●Reaches
millions through digital, print and ecommerce channels.

●Scalable
source of Bitcoin news and culture.

Bespoke
/ Seasonal Products

●In-house
event production and media teams enable rapid launch of bespoke and seasonal products.

●Faster
speed-to-market with lower production costs compared to companies without an experienced,
in-house production team.

●Built
to respond to client and audience demand in real time.

●Particularly
effective during election cycles, major market milestones and unique moments in Bitcoin adoption.

Our
advisory and consulting services is supplemented by Bitcoin for Corporations, which provides strategy advisory services to Bitcoin-native
and adjacent businesses navigating capital formation, strategic transactions, regulatory complexity and scale.

UTXO

UTXO
is our first investment in financial and asset management services and brings our shareholders exposure to Bitcoin-native businesses
across public and private markets. UTXO earns management fees and performance fees from its management over multiple funds.

The
largest fund, 210k Capital, is an event-driven, actively managed Bitcoin hedge fund that captures asymmetric upside across Bitcoin, Bitcoin-related
equities, market dislocations, derivatives and yield strategies. The 210k Capital fund actively manages Bitcoin exposure across macro
and liquidity regimes, seeking to capture asymmetric upside during bull markets while mitigating downside risk through discretionary
hedging and risk management. The investment process is driven by fundamental analysis, opportunistic positioning and disciplined risk
controls. Since its inception, 210k Capital fund has outperformed Bitcoin on an annualized basis, increasing AUM
and cumulative net return.

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Competition

Our
Bitcoin strategy generally involves, from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging
in other capital raising transactions with the objective of using the proceeds to purchase Bitcoin or Bitcoin related investments and
(ii) acquiring Bitcoin with our liquid assets that exceed working capital requirements. When we engage in such capital raising transactions,
we compete for capital with, among others, ETPs, bitcoin miners, digital assets exchanges, other digital assets service providers, other
companies that hold bitcoin or other digital assets as treasury reserve assets, private funds that invest in bitcoin and other digital
assets, and similar vehicles. An increase in the competition for sources of capital could adversely affect the availability and cost
of financing for our bitcoin purchases, and thereby could adversely affect the market price of our listed securities.

Following
the acquisition of BTC Inc and UTXO on February 20, 2026, the combined company’s business model is fundamentally differentiated
from Bitcoin ETFs, mining companies and other digital asset firms through a unique combination of direct Bitcoin holdings, ownership
of operating companies, and public market access. This integrated approach provides investors with a multifaceted exposure to the Bitcoin
ecosystem that is not available through traditional investment vehicles.

With respect to our healthcare operations, we compete in a highly fragmented market with direct and indirect competitors that offer varying
levels of impact to key stakeholders such as patients, clinicians, payor partners and physician partners. Our competition includes, among
other things, pain clinics as well as other non-opioid specialty alternative medicine clinics in Utah.

Marketing
and Customers

We
use and plan to use various marketing techniques to advertise our conferences and services and attract potential new clients, subscribers and patients.
Such techniques include events, conferences, digital and print magazine publications, posting videos on YouTube, email marketing, online
and social media marketing, print advertising in target markets, publishing research, and participating in speaking engagements.

Our
healthcare operations have two specific target markets: patients and businesses. We attempt to target patients suffering from chronic
pain and adults on opioids or more than one prescription medication. Further, we target businesses looking for data resources, expanded
behavioral clinic operations, and centers dedicated to wellness, research and analysis, market research, and consumer analyses.

The
majority of BTC Inc’s revenue comes from its events business and is in the form of shorter-term event sponsorships and ticket sales.
From time to time, BTC Inc may enter into multi-year agreements with certain vendors to sponsor events that include fixed-price arrangements.
We believe that when we enter into long-term contractual relationships it helps provide revenue visibility and stability, however, they
may also limit our ability to adjust pricing in response to market conditions.

Corporate
History

On
December 2, 2019, the Company filed its original articles of organization with the state of Utah under the name “Utah Therapeutic
Health Center, PLLC.”

On
April 15, 2020, the Company filed Articles of conversion with the State of Utah converting the entity from a PLLC to an LLC.

On
March 11, 2022, the Company filed Articles of Conversion with the State of Utah converting the entity from a limited liability company
to a corporation and formally changing the name of the Company to “Kindly MD, Inc.”

On
July 5, 2022, the Company filed Amended and Restated Articles of Incorporation with the State of Utah, adding a preferred class of stock
to its authorized shares and increasing the number of common shares authorized, among other corporate governance matters.

On
June 3, 2024, the company completed an initial public offering (“IPO”), resulting in the issuance of 1,240,910 shares of
common stock, par value $0.001 per share (the “Common Stock”) and received gross proceeds of approximately $6.8 million. After deducting offering expenses, the Company received net proceeds
of approximately $5.9 million.

On
August 14, 2025, the Company consummated its merger with Nakamoto Holdings Inc (“Nakamoto Holdings”).

On
December 17, 2025, the Company filed a certificate of conversion with the Delaware Secretary of State and subsequently converted from
a Utah corporation to a Delaware corporation.

On
January 21, 2026, the Company undertook a rebranding to change its corporate name from “KindlyMD, Inc.” to “Nakamoto
Inc.”.

On
February 6, 2026, the Company filed a DBA in Utah for the Healthcare Operations to continue operating as KindlyMD, Inc.

10

On
February 20, 2026, the Company completed the transaction contemplated by the Agreement and Plan of Merger (the “UTXO Merger Agreement”)
by and among the Company, UTXO GP Merger Sub, LLC, a Tennessee limited liability company and a wholly-owned subsidiary of the Company
(“UTXO Merger Sub”), UTXO, David Bailey, in his individual capacity, Tyler Evans, in his individual capacity, and the equityholder
representative party thereto, and the Agreement and Plan of Merger (the “BTC Merger Agreement” and, together with the UTXO
Merger Agreement, the “Merger Agreements”) with BTC Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary
of the Company, BTC Inc, and the stockholder representative party thereto, as discussed further in Note 16 in our consolidated financial
statements and Item 13 included in this Annual Report on Form 10-K.

Intellectual
Property

We believe our intellectual property drives growth in our revenues, particularly
with respect to partnerships, licensing rights, and media creation and distribution. Our intellectual property includes the “NAKAMOTO,”
“BTC INC,” “BITCOIN CONFERENCE,” “BITCOIN2026,” “BITCOIN HONG KONG,” “BITCOIN AMSTERDAM,”
“BITCOIN MENA,” “BITCOIN MAGAZINE,” “BITCOIN FOR CORPORATIONS,” “WHALE PASS” AND “UTXO”
brands, tradenames, and logos, the nakamoto.com, b.tc, bitcoinmagazine.com, bitcoinforcorporations.com and utxo.management domain names,
other trademarks and copyrights associated with us and our media properties and events, and the rights to use the intellectual property
of our commercial partners through strategic licensing rights. Substantially all our intellectual property and owned assets that we create
or acquire associated with our content and events are protected by trademarks and copyrights, whether registered or unregistered.

Seasonality

BTC
Inc’s largest revenue source is through its events and conference business. Revenue and operating income for BTC Inc will be impacted
by when certain event conferences occur and in particular the flagship Bitcoin conference held in the United States. The flagship Bitcoin
conference this year is scheduled to be held in April 2026.

Employees
and Human Capital

As
of December 31, 2025, we had a total of 65 employees, consisting of 33 full-time employees and 32 part-time employees across all of subsidiaries.
In our Healthcare operations business, we employ 23 full-time employees and 32 part-time employees. We also utilize independent
contractors, including certain of our senior management, to supplement our workforce.

Government
Regulation

Bitcoin
Operations

The
laws and regulations applicable to Bitcoin and digital assets are evolving and subject to interpretation and change.

Governments
around the world have reacted differently to digital assets; certain governments have deemed them illegal, and others have adopted regulatory
frameworks permitting their use and trade with varying degrees of restriction, while in some jurisdictions, such as the U.S., digital
assets are subject to overlapping, uncertain and evolving regulatory requirements.

As
digital assets have grown in both popularity and market size, the U.S. Executive Branch, Congress and a number of U.S. federal and state
agencies, including the Financial Crimes Enforcement Network, the Commodity Futures Trading Commission (“CFTC”), the United
States Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority, the Consumer Financial Protection
Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the Internal Revenue Service
(“IRS”) and state financial regulators, have been examining the operations of digital asset networks, digital asset users
and digital asset exchanges, with particular focus on the extent to which digital assets can be used to violate state or federal laws,
including to facilitate the laundering of proceeds of illegal activities or the funding of criminal or terrorist enterprises, and the
safety and soundness and consumer-protective safeguards of exchanges or other service-providers that hold, transfer, trade or exchange
digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital
assets to investors. In addition, federal and state agencies, and other countries have issued rules or guidance regarding the treatment
of digital asset transactions and requirements for businesses engaged in activities related to digital assets.

Depending
on the regulatory characterization of Bitcoin, the markets for Bitcoin in general, and Nakamoto’s activities in particular, Nakamoto’s
business and Bitcoin strategy, including the “treasury” approach, may be subject to regulation by one or more regulators
in the United States and globally. Ongoing and future regulatory actions may alter, to a materially adverse extent, the nature of digital
assets markets, the participation of industry participants, including service providers and financial institutions in these markets,
and our ability to pursue our Bitcoin strategies. Additionally, U.S. state and federal and foreign regulators and legislatures have taken
action against industry participants, including digital assets businesses, and enacted restrictive regimes in response to adverse publicity
arising from hacks, consumer harm, or criminal activity stemming from digital assets activity. U.S. federal and state energy regulatory
have expressed concern regarding the total electricity consumption of cryptocurrency mining, and the potential impacts of cryptocurrency
mining to the supply and dispatch functionality of the wholesale grid and retail distribution systems. Some state legislative bodies
have passed, or are actively considering, legislation to address the impact of cryptocurrency mining in their respective states. For
risks associated with the regulations to which we may be subject to, please see “Risk Factors — Risks Related to Our Bitcoin Strategy and Holdings” of this Annual Report on Form 10-K.

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Under the Commodity Exchange Act (the “CEA”),
the CFTC has broad enforcement authority to police market manipulation and fraud in spot digital asset markets in which we may transact.
Beyond instances of fraud or manipulation, the CFTC generally does not currently regulate cash or spot market transactions involving digital
assets (such as the Bitcoin treasury strategy) or exchanges that facilitate such transactions, provided that such transactions do not
utilize margin, leverage, or financing. Rather, the CFTC’s regulatory authority generally applies to futures, swaps, other derivative
products and certain retail leveraged commodity transactions involving digital asset commodities, including the markets on which these
products trade.

In March 2026, the SEC and CFTC released joint agency
guidance taking the position that Bitcoin and other digital assets such as ETH, SOL, XRP, and ADA are not securities, but that they are
“digital commodities.” This distinction is because they are linked to, and derive their value from, their functionality and
market dynamics, rather than the expectation of profits based on the managerial efforts of others. The guidance explained that certain
digital assets will continue to be classified as securities, such as “tokenized” securities that represent regulated securities.
Additionally, other kinds of investments that are advertised in such a way that promises that the issuer will take efforts to generate
profits for investors will be considered securities under SEC jurisdiction.

The joint agency guidance also clarifies that certain
crypto assets that are not themselves securities (e.g., Bitcoin) may be subject to SEC regulation as an investment contract. More specifically,
the sale of these assets will be subject to SEC regulations (i.e., as investment contracts) if the issuer makes representations that encourage
people to invest in a shared enterprise with promises that the issuer will engage in managerial efforts or take action to generate profits.
All advertising regarding these products should be reviewed to ensure the representations do not affect the commodity classification.

As a result of the above, Bitcoin is
not currently considered to be a security and is not subject to the CFTC’s regulatory jurisdiction. However, derivatives such as
options on Bitcoin may be within the CFTC’s jurisdiction, and sales of Bitcoin that involve representations regarding the managerial
efforts of an issuer that will generate profits for purchases may qualify as investment contracts subject to the SEC’s jurisdiction.
Future regulatory developments with respect to Bitcoin from
the CFTC, SEC, or any other federal or state regulator, are difficult to predict.

In
addition, since Bitcoin network transactions are pseudonymous, they may be susceptible to misuse for criminal activities, such as money
laundering. Such transactions are recorded on a public ledger, allowing for forensic analysis that can link transactions to individuals
or entities under certain circumstances. Nevertheless, this misuse, or the perception of such misuse, could lead to greater regulatory
oversight of Bitcoin and Bitcoin platforms, and there is the possibility that law enforcement agencies may seize or shut down digital
asset exchanges or service providers, which could prevent users from accessing custodial-held assets. Users who self-custody Bitcoin
in private wallets remain outside the direct reach of such actions. For example, the U.S. Treasury Department’s Office of Foreign
Assets Control has issued updated advisories regarding the use of virtual currencies, added a number of digital asset exchanges and service
providers to the Specially Designated Nationals and Blocked Persons list and engaged in several enforcement actions, including a series
of enforcement actions that have either shut down or significantly curtailed the operations of several smaller digital asset exchanges
associated with Russian and/or North Korean nationals.

As
noted above, activities involving Bitcoin and other digital assets may fall within the jurisdiction of more than one financial regulator
and various courts and such laws and regulations are rapidly evolving and increasing in scope. On January 23, 2025, President Trump issued
an executive order titled, Strengthening American Leadership in Digital Financial Technology. While the executive order did not mandate
the adoption of any specific regulations, the executive order identifies certain key objectives to guide agencies involved in cryptocurrency
regulation, including (i) protecting the sovereignty of the United States dollar by promoting the development of United States dollar-backed
stablecoins, (ii) providing regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved
in digital assets, including through well-defined jurisdictional regulatory boundaries, and (iii) taking measures to protect Americans
from the risks of Central Bank Digital Currencies (“CBDC”). To achieve these objectives, the executive order established
a working group on digital asset markets within the National Economic Council, comprised of representatives from key federal agencies,
with a tight timeline for examining existing regulations and proposing a new regulatory framework. There have also been several bills
introduced in Congress that propose to establish additional regulation and oversight of the digital asset markets.

Legislation
is currently pending in the U.S. Congress which, if passed and signed into law, could significantly affect the digital currency and digital
asset markets. One such piece of legislation is the Digital Asset Market Clarity Act of 2025 (the “CLARITY Act”),
which would clarify which digital currencies and digital assets are commodities, as opposed to securities. Additionally, the CLARITY
Act would subject certain spot-market digital commodities to a comprehensive regulatory regime for the first time. For example, the legislation
would require several different types of entities to register with the CFTC and/or SEC and comply with various regulatory requirements
that would be promulgated by the CFTC and SEC. Further, the legislation would require issuers of new and “non-mature” digital
commodities to make a mandatory filing with the SEC containing information regarding the issuer, planned use of proceeds, economics,
governance and development roadmap. The CLARITY Act was passed in the U.S. House of Representatives, and the U.S. Senate is currently
considering a companion bill, which will likely differ from the U.S. House of Representatives version in a number of ways. The details
of the legislation are likely to change from its current form as it is reviewed and revised by the U.S. House of Representatives and
the Senate, and it is unknown at this time whether it will be approved.

We
are subject to applicable environmental laws, but given the nature of our business and that we have no owned real property the costs
of such compliance are not material to the business.

12

Healthcare
Operations

Companies
operating in the healthcare industry in the U.S. are required to comply with extensive and complex laws and regulations at the federal,
state and local government levels. We are subject to local, state, federal and international laws, statutes, rules, policies, and regulations
(collectively “Regulations”) that relate directly or indirectly to our operations. These include, among other things, Regulations
relating to: the provision and reimbursement of health care services; licensure and standards of professional practice for clinicians
and alternative medicine providers; handling of controlled substances; relationships with physicians and other referral sources; privacy
and data protection requirements; activities regarding competitors; land use and zoning requirements. Our business operations involve
the collection, transfer, use, disclosure, security, and disposal of personal or sensitive information. As a result, our business is
subject to complex and evolving U.S. and international laws and regulations regarding privacy and data protection. We are also subject
to common business and tax rules and regulations pertaining to the operation of our business. Below is a discussion of the federal and
state-level regulatory regimes in those jurisdictions where we are currently directly involved.

We
are subject to the Controlled Substances Act (“CSA”) as enforced by the Drug Enforcement Administration (“DEA”).
The CSA is the federal U.S. drug policy under which the manufacture, importation, possession, use, and distribution of certain narcotics,
stimulants, depressants, hallucinogens, anabolic steroids, and other chemicals are regulated. The DEA is the federal agency responsible
for enforcing the CSA. A pain clinic that prescribes opioids must register with the DEA and follow strict record-keeping, reporting,
and security measures to ensure that these substances are not misused. Non-compliance can result in substantial penalties and criminal
charges.

Food
and Drug Administration (the “FDA”): The FDA is responsible for protecting the public health by ensuring the safety, efficacy,
and security of drugs, biological products, and medical devices. Our clinic must only use FDA-approved medications and devices and follow
FDA guidelines in their use.

Utah
State Medical and Professional Licensing Boards: Each state has its own medical board and other agencies that license and regulate physicians
and other healthcare professionals. They also establish rules for clinics and the prescribing of controlled substances. We are subject
to licensing and other requirements set forth by the Utah Department of Professional Licensing with regard to any Nurse Practitioners,
Physician Assistants, Medical Doctors, Psychologists, and Licensed Clinical Social Workers who we engage or employ to act on our behalf.

HIPAA
and State Privacy Laws: HIPAA as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing
regulations sets national standards for the security of electronic health care transactions, the privacy of protected health information
(“PHI”), and the conduct of healthcare providers. HIPAA requires the implementation of administrative, physical, and technical
safeguards to ensure the privacy, integrity, security, and availability of PHI. HIPAA’s requirements are also applicable to the
contractors, agents, and other business associates of covered entities that create, receive, maintain, or transmit PHI in connection
with their provision of services to covered entities. In addition to HIPAA, depending on the scope and nature of our operations, we could
be subject to other privacy-related requirements under federal law, such as the Federal Substance Abuse Confidentiality Regulations (42
C.F.R. Part 2), which serves to protect patient records created by federally assisted programs for the treatment of substance use disorders.
Further, states may have their own laws protecting the privacy and security of personal information, including health information. We
must comply with such laws in the states where we do business in addition to our obligations under HIPAA. State data privacy and security
laws are subject to change and require us to modify our operations to comply with more stringent state laws in jurisdictions where we
operate. We could be subject to financial penalties and sanctions if we fail to comply with these laws.

Anti-Kickback
Statute, the Stark Law, and the False Claims Act and Similar State Laws: Regulations applicable to our operations also include the
federal Anti-Kickback Statute, the Stark Law, the federal False Claims Act (“FCA”), the Eliminating Kickbacks in
Recovery Act (“EKRA”), and similar state laws. In general, these laws impact the relationships that we may have with
physicians and other potential referral sources. The Company has and, in the future, may have additional financial relationships
with physicians, medical professionals, and other health care facilities who refer patients to our clinics, including employment
contracts, leases and professional service agreements. The U.S. Department of Health and Human Services, Office of the Inspector
General has issued certain safe harbor regulations that enumerate the practices deemed acceptable under the Anti-Kickback Statute,
and similar exceptions have been promulgated by CMS under the Stark Law. While we strive to ensure that any arrangements with
referral sources comply with any applicable safe harbor under the Anti-Kickback Statute and Stark Law, it is possible that certain
arrangements may not fall squarely within the scope of any such safe harbors or similar exemptions under applicable state laws.
Failure to meet a safe harbor does not mean that an arrangement automatically violates the Anti-Kickback Statute, however, it may
subject the arrangement to greater legal and regulatory scrutiny. Even if our arrangements are compliant with Anti-Kickback Statute,
they may still face scrutiny under EKRA. Moreover, while we believe that our arrangements with physicians and other referral (and
potential referral) sources comply with applicable Stark Law exceptions, the Stark Law is a strict liability statute for which no
intent to violate the law is required. Moreover, the FCA prohibits, among other things, knowingly presenting, or causing to be
presented, false claims to government programs, such as Medicare or Medicaid. Some states have adopted similar fraud and false
claims laws, including laws that are not limited to government healthcare programs. Governmental entities routinely engage in
significant civil and criminal enforcement efforts against healthcare companies under the FCA and other civil and criminal statutes.
Further, FCA investigations can be initiated by private parties through qui tam (or whistleblower) lawsuits, which is a generally
growing trend in recent years. Penalties for FCA violations include fines per false claim or statement, plus up to three times the
amount of damages sustained by the federal government. Violations of the FCA can also result in exclusion from participation in
government healthcare programs.

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Centers
for Medicare & Medicaid Services (“CMS”): If or when Nakamoto treats Medicare or Medicaid patients, CMS rules generally
supply additional requirements regarding billing, reporting, and patient care guidelines.

Billing and Pricing Transparency Laws: Protections
against surprise billing have also been promulgated in connection with the Consolidated Appropriations Act of 2021, which introduced the
“No Surprises Act.” Effective on January 1, 2022, this rule created new protections against surprise billing and excessive
cost sharing for healthcare consumers and creates a dispute resolution process to resolve cost disparities. As a result of this law, we
could face disruptions in the ability for us to receive timely payment or be subject to penalties for noncompliance, which, in turn, could
have a material adverse effect on our business. In addition, multiple states have enacted or are considering similar laws that would apply
to patients having state-regulated insurance. If jurisdictions where we provide services enact similar laws, these measures could limit
the amount we can charge and recover for services we provide where we have not contracted with the patient’s insurer and thus could
have an adverse effect on our business. There is also risk that additional legislation at the federal and state level will give rise to
major third-party payors leveraging this legislation or related changes as an opportunity to terminate and renegotiate existing reimbursement
rates.

Other
State Healthcare and Related Laws: In addition, many states have laws, regulations, guidance, or case law that prohibit the
corporate practice of medicine prohibition, which generally prohibit the practice of medicine (and potentially other professional
services) by lay-persons or entities and are intended to prevent unlicensed persons or entities from interfering with or
inappropriately influencing providers’ professional judgment. Utah has codified certain corporate practice of medicine
restrictions preventing unlicensed persons from interfering with the judgment of licensed medical professionals. Moreover, as the
use of AI in health care and other industries continues to grow, it is likely that new laws regulating the development and use of AI
will be proposed and enacted at the federal, state or local level. Notably, Utah recently enacted the Artificial Intelligence Policy
Act into law, which amends the Utah consumer protection and privacy laws to require disclosure, in certain circumstances, of AI use
to consumers. This law went into effect on May 1, 2024 and was subsequently amended in March 2025, which, among other things, narrowed the scope of disclosure obligations
under the law. Accordingly, we must monitor our compliance with and stay abreast of any
changes to laws related to AI in every jurisdiction in which we operate on an ongoing basis as this is a rapidly evolving and
developing area of law.

Hemp
and Cannabis

Kindly
does not (and Nakamoto and all of its other subsidiaries do not) grow, process, or sell cannabis in any form.

Federal
Regulation of Hemp and Cannabis

The
U.S. federal government regulates drugs through the Controlled Substances Act, which places controlled substances, including cannabis,
in a schedule. Throughout its history, cannabis has been classified on Schedule I, the highest tier of restriction reserved for substances
with no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential
for abuse. However, cannabis is currently going through the process of being re-designated on Schedule III, a far less restrictive schedule
that it would share with drugs such as ketamine and Tylenol with codeine.

In
May of 2024, the DEA published a Proposed Rule facilitating cannabis’s rescheduling, and in December of 2025, President Trump signed
an executive order directing the Attorney General to expedite the process. This regulatory shift, if completed, will open up pathways
to clinical research and drug trials for cannabis-based medicine. But at the present, the Food and Drug Administration has only approved
a few cannabis-based products. This includes, Epidiolex, which uses non-psychoactive CBD from cannabis for the treatment of seizures associated
with two epilepsy conditions. The FDA has also approved several other products that are derived from or synthetically related to cannabis, which includes
Marinol, Syndros and Cesamet. The FDA has not approved cannabis or cannabis compounds as a safe and effective
drug for any other condition.

Hemp,
meanwhile, is a blanket legal designation for specific cultivars of cannabis plants and their corresponding plant material that meet
the requirements outlined in the 2018 Farm Bill, aka, the Agriculture Improvement Act of 2018 – chiefly, having a concentration
of THC (tetrahydrocannabinol, the main psychoactive compound in cannabis) of less than .3% on a dry weight basis. The federal rules governing
hemp production, sale, and the creation of hemp-based products have undergone numerous revisions since 2018, both at the Congressional
and agency levels, most recently in November of 2025 when Congress amended the definition of hemp to include limits on the permissible
federal threshold for all THC, rather than only delta-9 THC as before. This amended definition of “hemp” will
take effect on November 12, 2026 and is not expected to impact healthcare operations or patient care.

FDA
Regulation of Cannabis and Hemp Products

Cannabis’
longstanding Schedule I designation has served to effectively block the FDA from even considering approval of any cannabis-based medicine
(with the aforementioned exception of Epidiolex, which, though preceding passage of the Farm Bill, used only non-psychoactive CBD and
would likely now be considered hemp-based, rather than cannabis-based). The FDA regulates products containing hemp, cannabis or derived
compounds under the Federal Food, Drug, and Cosmetic Act (the “FD&C Act”). The FDA currently prohibits THC or CBD products
from being sold as medicine or dietary supplements or from impersonating the brands of non-cannabis products, especially when the brand
in question sells products targeted at children, like candy or soda.

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Kindly does not (and Nakamoto and all of its other subsidiaries do not)
market or sell hemp products as dietary supplements or medicine, nor does it make any health claims related to said products. Accordingly,
neither Nakamoto nor Kindly been the subject of any warning letters or enforcement actions taken by the FDA.

State
Regulation of Hemp and Cannabis

State
laws that permit and regulate the production, distribution and use of cannabis for adult use or medical purposes are in direct conflict
with the Controlled Substances Act, which makes cannabis use and possession federally illegal. Although certain states and territories
of the U.S. authorize medical and/or adult use cannabis production and distribution by licensed or registered entities, under U.S. federal
law, the possession, use, cultivation and transfer of cannabis and any related drug paraphernalia are illegal and any such acts are criminal
acts under federal law. Though Nakamoto does not engage in any activities prohibited by the CSA, it could conceivably be seen as “aiding
and abetting” the commission of CSA violations through the prescription of medical cannabis.

The
Utah Medical Cannabis Act (H.B. 3001 Utah Medical Cannabis Act) directs the Utah Department of Health (“UDOH”) to issue medical
cannabis cards to patients, register medical providers who wish to recommend medical cannabis treatment for their patients, and license
medical cannabis pharmacies. Physicians, Advanced Practice Registered Nurses, and Physician Associates who are licensed to prescribe
a controlled substance are allowed to recommend medical cannabis treatment for their patients. Providers must register through an electronic
verification system established by the UDOH. Registered providers may only recommend medical cannabis treatment to a patient in the course
of the physician-patient relationship after completing and documenting in the patient’s record a thorough assessment of the patient’s
condition and medical history.

Hemp
products are approved for sale in Utah and registered by the Utah Department of Agriculture and Food (“UDAF”). This process requires a complete product registration application,
a full panel certificate of analysis (“COA”), a product label design that complies with administrative rule R68-26-5, and
a fee for each cannabinoid product registered. Each registration is effective for 12 months and must reapply for registration each year.
Hemp is only allowed for sale in registered establishments through UDAF.

The
Utah Department of Agriculture and Food oversees the market for industrial hemp and medical cannabis in Utah and is governed, in part,
by H.B. 227 Hemp Amendments. This bill outlines the hemp producer registration process, establishes the age of 21 as the legal age in
which a person in Utah may purchase a hemp product and generally governs the rules surrounding legal limits of THC and THC analogs in
hemp products to 5mg per serving and 150mg total per package. UDAF also regulates compliance by monitoring processors and retail establishments.
All products labeled and sold in Utah must be approved by UDAF.

Product
registration application and COA requirements are subject to Utah administrative rule R68-26-4 and R68-37 for testing standards. Label
requirements are found in Utah administrative rule R68-26-5.

Although
our activities are believed to be compliant with applicable state and local laws, strict compliance with state and local laws with respect
to cannabis may neither absolve us of liability under U.S. federal law, nor may it provide a defense to any federal proceeding which
may be brought.

The
risk of federal enforcement and other risks associated with our business are described in the section entitled “Risk Factors.”

Telemedicine

The
Utah Medical Practice Act allows healthcare providers to establish a provider-patient relationship via telemedicine, as long as the standard
of care is the same as in-person visits. Healthcare providers providing telehealth and telepsychology telemedicine services to patients
in Utah must be licensed to practice in the state. Utah allows for telemedicine prescribing as long as the standard of care is the same
as in-person visits. Controlled substances have additional regulations that often require an in-person exam. Locations that handle and
dispense controlled substances must comply with strict federal and applicable state regulations regarding the purchase, storage, distribution
and disposal of such controlled substances. All interactions between the treating provider and patient are considered healthcare interactions
and therefore are governed by applicable HIPAA requirements.

The
Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (the “Ryan Haight Act”): This is a federal law that regulates
the distribution of controlled substances online. When Kindly uses telemedicine services to prescribe opioids, we must comply with the
Ryan Haight Act. The Ryan Haight Act requires a valid prescription for controlled substances, which generally entails a prior in-person
medical evaluation.

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Telepsychology
services in Utah also require provider licensing, which is governed by the Utah Psychology Licensing Board. Providers need to meet stringent
educational, internship, and examination requirements, aligning with the American Psychological Association’s guidelines.

Corporate
practice of medicine laws aim to preserve the physician-patient relationship from potential commercial intrusions. In Utah, these laws
apply to telemedicine. We enter into contractual agreements with physicians and Advanced Practice Clinicians to preserve the provider-patient
relationship from commercial intrusions.

Fee-splitting,
the sharing of professional fees between medical practitioners and non-medical practitioners, is illegal in Utah. Cybersecurity is governed
by the Utah health Information Network standards, which provide a framework for data security and protection in healthcare, which we
adhere to. We utilize encryption for all healthcare related communication channels and data storage, inclusive of telemedicine. Insurance
regulation also influences telemedicine practice in Utah. Utah law mandates private payer parity for telemedicine services, meaning private
insurance companies must cover telemedicine services at the same rate as in-person services. However, specifics of billing and reimbursement
vary among insurers.

Expansion
of Healthcare Operations Outside of Utah

At
present, our healthcare operations are solely based in Utah, and we have not currently targeted or planned specific expansion into other
states. Given the complex, state-specific regulatory landscape of the healthcare industry, expanding our operations will necessitate
extensive preparation and understanding of the relevant regulations, licensure, and registration requirements in any such states.

Each
state has a unique set of rules and regulations pertaining to the use, possession, production, and distribution of scheduled medications.
Consequently, any potential expansion will involve a careful evaluation of the state-specific regulatory environment, ensuring full compliance
with all requisite laws and regulations to prevent legal ramifications.

Available
Information

Our
internet address is nakamoto.com. At our investor relations website, investors.nakamoto.com, we make available free of charge a variety
of information for investors, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,
proxy statements, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act, as soon as reasonably
practicable after we electronically file such reports with, or furnish those reports to, the SEC at www.sec.gov. Further, corporate governance
information, including our board committee charters, code of conduct and whistleblower policies, are also available on our investor relations
website at investors.nakamoto.com.

The
information contained on or made available through our website or any of the websites referred to above are not incorporated by reference
into, and does not form a part of, this Annual Report on Form 10-K or in any other report or document we file with or furnish to the
SEC. Further, references to the URLs for these websites are intended to be inactive textual references only.

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